By David Glenn Cox
Okay, the fun is over. Time to get back to work. Among the many things Republicans lost on Tuesday night. The House, the Senate, control of Congress, and their damn minds. There was something less noticed but still important. There were 44 ballot initiatives across the country limiting or curtailing AI data centers. Forty-three of them passed easily. Suspend judgment for now and assume the experts and billionaires are all wrong and AI won’t destroy the human race.
There’s an old piece of film out there with two steam locomotives barreling down the track, balls to the wall smacking into each other at a high rate of speed. That reminds me of our current situation. My experience with AI is rudimentary at best. When you click on the “Help” button, but instead you get, “Hi! I’m Cueball, and I’ll be your AI assistant! I see you’re having problems. Did you forget your password of twenty years? Are you certain your machine is turned on? Could it be that you’ve suffered a full psychological breakdown and only believe the machine is malfunctioning? AI = Artificial Interference.
A new level of silicon bureaucracy designed to sap your strength and dull your will to live. “Let’s go down this helpful checklist! 1. Is your machine turned on? 2. Are you certain you’re on the correct website? 3. Are you using the correct password? 4. Is there an error message? 5. Is the website down? Is your computer broken? You will never get them to admit to anything. And the AI agent isn’t there to help you if it involves actual help. It’s there to stymie you. To frustrate you. They’ve tried to help you, but it’s all YOUR fault!
But AI is seen as a Goldrush on Wall Street. The next big thing. And it’s going to be really, really, really big! Sutter’s Mill, big. Everybody is dropping their shovels and running towards the bonanza. It’s going to be a Goldrush, and probably half of those companies spending billions today won’t be in business in five years. This GoldRrush mentality sets the stage for us. The first in will win, and everyone else will go broke.
The cost of building these data centers is astronomical, running into the billions of dollars. So to be firstest with the mostest, you have to borrow from the bank bigly or go home. Ten, twenty or fifty billion dollars, it’s going to be great! In most cases, the AI provider has one mega customer doing most of the heavy lifting. Amazon is 92% of their customer base, along with Fred’s Hardware store, the A&O fish market. Suddenly, Amazon is writing huge checks to subsidize the AI build out. Can you imagine the interest cost on twenty-billion dollars?
Spending billions while earning pennies. It’s going to be wonderful. We’re all going to get rich like gods. Provided everything goes as planned. The defeated Texas governor Greg “Bubba” Abbott had imposed a moratorium on new data centers… because? Because too many is too many. Competition is death! We can’t be certain of getting rich with a bunch of competitors getting in the way. It’s reached the point where they are literally running out of money. They’ve tapped out all of their bank credit. They’ve gone to hedge funds, insurance companies and private credit. It’s like looking under the couch cushions for loose change.
Can you see the locomotives firing up yet? Growing public pressure means delay, and delay means millions of dollars spent on the wrong side of the ledger. It’s going to be great. It’s going to be wonderful. But it’s going to be won’t pay the bills today. Some of the major players in the AI market are starting to get cold feet. If our plans get delayed by a year or two, can we still make lots of money? Do we still want to do this? Are we headed for doom? Whose big idea was this? Whadda you mean, we’re obligated? Whadda you mean, we need more money? Whadda you mean by ruined?
Everyone is spending and building, but no one is making any money. And now with the public putting on the brakes. Chances are the AI bloom will turn to bust. They’ve borrowed all the money in the world, and now, “Houston, we have a problem.” They’ve spent twenty or fifty billion dollars and the now the project has been delayed by aroused voters for a year or two! Argh! Damn, democracy! What the fuck did you have to go ask the voters for?
They have literally borrowed all the money there is available to borrow, and now there’s a holdup. Some of these companies have been taking a beating in the stock market. They only have two choices: Continue on and hope for the best or cut and run for it. Get out quick before the bottom falls out or ride the wave until the end. The chances for easy riches are fading and the fear of prolonged over indebtedness grows exponentially. These aren’t unsuccessful companies. These are the industry leaders who thought the next big thing was right on the horizon. But the AI Goldrush proves again that all that glitters is not gold.
The AI stocks are collapsing, and investors now shake their heads at data center investments like Floriduh land deals. Banks, hedge funds and private credit now ask. “You’ve lent them how much? Whose crazy idea was that?” Yes, America, they’ve done it again. The banks, hedge funds and private credit firms have made some bad loans again. In some cases the loans aren’t bad yet, but they’re going to be. In other cases, they were only in the planning stages and joyously canceled.
Now, you can see why the billionaires were dropping millions on hapless Republican candidates. If the Democrats get elected, it could cost us millions in delays. Damn, democracy! Who ever heard of letting poor people decide things? Under Gregg “Bubba” Abbott, this was going to be easy, but now?
Two trains barreling at each other at top speed. One is trying to reach the Goldrush while the other is trying to stop the Goldrush. The Goldrush, which favors the few and eschews everyone else. A project which may make industry more profitable, but more likely will only make it more bureaucratic.
If AI turns out to not be a Goldrush but a money siphon, there is no plan “B.” This is it! With your shield or on your shield. Win or die! AI might eventually wipe out all humanity but not before it takes out Wall Street and the banking industry first.
They’ll need another twenty billion on top of the fifty billion they’ve already spent. And then…in five years or so, the money should start rolling in!
“Now, my friends, we have got to hit the root with the ax. Centralized power in the hands of a few, with centralized credit in the hands of a few, is the trouble.” – Huey Long
We shall have to say right here and now that the hand of imperial finance shall not go farther into the strangulation of the American people and that the hand of imperialistic banking control shall be decentralized instead of centralized in America. -Huey Long
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